How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask PDtax Your Own Question
PDtax
PDtax, CPA, MBA
Category: Finance
Satisfied Customers: 4099
Experience:  Tax professional and business consultant for 35 years.
64119565
Type Your Finance Question Here...
PDtax is online now
A new question is answered every 9 seconds

I am having to complete a 401k withdrawal reasons.

Customer Question

I am having to complete a 401k withdrawal for medical reasons. With the withdrawal, I will be in the 28% tax bracket. Considering the 10% penalty, I was planning to withhold 38% federal and 3.75% state (Illinois). Does that sound correct from the withholding perspective?
Submitted: 1 year ago.
Category: Finance
Expert:  PDtax replied 1 year ago.
Welcome to the site. I'mCustomer and will be helping you today.
If you can itemize, the benefit of the state tax would reduce the federal rate, and hardship medical withdrawals escape the 10% penalty and are itemized deductions if you exceed the floor.
I think you could save 10% for the penalty, and still be slightly overpaid with the withholdings you plan.
Thanks for asking at just answer. Positive feedback is appreciated. I'mCustomer
Customer: replied 1 year ago.
Will the fact that the expenses are medical allow me to write it iff tio?
Expert:  PDtax replied 1 year ago.
Yes, the medical you are paying with these funds would be a medical itemized deduction.
That's why the 28% plus the 3.5% will likely be slightly in excess of what you need.
Customer
Expert:  PDtax replied 1 year ago.
Please advise if you need anything further.
If I have answered your questions, please rate my response using the rating scale below.
Customer